Jan. 23 (Bloomberg) -- India’s main opposition party, the
Bharatiya Janata Party, unexpectedly dumped its president Nitin
Gadkari less than 15 months before federal elections after graft
allegations thwarted his attempts to win a second term.

Gadkari resigned late last night after the income tax
department continued with its investigations into companies he
founded. Rajnath Singh, who was BJP president between 2006 and
2009, will take charge of the party, replacing Gadkari.

“I have committed no wrong or any impropriety either
directly or indirectly,” Gadkari said in a statement. The
“government has been making an effort to spread disinformation
about me in order to hurt me and my party,” he said yesterday.

The income tax investigation into Gadkari’s companies
blunts the BJP’s ability to target Prime Minister Manmohan
Singh’s ruling coalition over a series of high-profile graft
scandals that have dented the popularity of his government.
Gadkari’s resignation comes amid jockeying by BJP leaders to be
its candidate for prime minister in an election that must be
held by May 2014.

Income tax officials are conducting investigations at eight
different locations at companies linked to the Purti Group,
which is owned by Gadkari, NDTV television channel reported,
without saying where it got the information. The income tax
department is investigating the companies’ financial records and
its investors, the television channel said.

Retail FDI

Singh, who will take charge of the party, is a former chief
minister of Uttar Pradesh, India’s most populous state. During
Singh’s last tenure as president that ended in 2009, the BJP
were routed in elections suffering their heaviest election
defeat in two decades.

The Hindu-nationalist BJP, the Congress party’s chief
rival, is divided over who should lead the party into the next
elections and in what direction. While it supported greater role
for foreign investment in the economy when it headed the
government between 1998 and 2004, the party has repeatedly
opposed attempts by the present administration to allow overseas
investment in areas such as retail.

A poll published in August by Nielsen Holdings NV and India
Today magazine forecast that a BJP-led bloc would wrest power
away from Congress at the next election. According to the
survey, Singh’s coalition will win 181 seats, 78 fewer than it
secured in the May 2009 election, while the BJP bloc of parties
may win as many as 205.

Indian opinion polls routinely face sampling difficulties
that can affect their accuracy, such as the make-up of the
electorate that includes diverse castes, regional and linguistic
groups.